Watch collections: key insurance trends in 2024

Lockton has spoken with high-net-worth specialist insurers to gauge the state of the watches market in 2024, and the effect it may have on premiums.

A number of factors are shaping the watch market in 2024, from a booming secondary watches market to a rise in aggravated thefts, particularly in London. Amid this mixed picture, the onus is on owners and collectors to demonstrate responsible management and mitigate against potential loss.

Secondary market driving up watches value

The secondary watches market has exploded in recent years, with a flood of consumers entering the market in search of discounted or discontinued timepieces, aided by the online resale platforms. That trend is expected to continue; according to Deloitte, the market for vintage and pre-owned watches will top £30 billion by 2030 (opens a new window), and is set to make up more than half of the primary market.

Watchmakers are playing their own part in the growth, with brands such as Rolex launching their own certification (opens a new window) for pre-owned pieces. Others are limiting the supply of new watch models, capitalising on strong consumer demand for exclusivity. These factors are driving up the price of second-hand pieces, which often trade well above retail prices, and increasing the value of collections. According to one insurer, the value of a typical ‘large’ collection was approximately £5m a decade ago. Today, that benchmark sits closer to £20m, with the largest extending up to £100m.

Met Police takes action on thefts

A rise in watch thefts, correlating with deepening economic hardship, has driven up the cost of insurance premiums in recent years. According to data obtained by pre-owned specialist Watchfinder & Co. (opens a new window), thefts of watches in the UK increased by 41 per cent in 2022 compared to the year prior, with London accounting for nearly half of all cases. Similarly, approximately 600 stolen watches are registered per month via The Watch Register (opens a new window), a database for lost and stolen watches. Insurers are alive to these threats – one put aggravated theft at 20% of all losses for watches, with loss ratios for watches increasing year on year.

Despite this, action is being taken to combat thefts. The capital has profited from a coordinated police effort to apprehend thieves (opens a new window), helping to reduce annual thefts by half in the months up to July 2023. Meanwhile, of the lost and stolen watches registered with The Watch Register, 721 were located in 2023, at a rate of 3-4 per day. Interestingly, 10% of that total were fakes. On average, approximately 50% of watches found through the database are recovered within a year of their theft, and a third within six months.

Nevertheless, insurers continue to preach care, with many scrutinising collectors’ lifestyles more closely. They may seek to understand how long an individual has been collecting, how frequently they wear their pieces, and in what circumstances, and may ask questions regarding the collector’s public profile. Unsuprisingly, prestige brands entail the greatest risk, with Rolex accounting for 44% of all watches listed as lost or stolen with The Watch Register. Other brands targeted by thieves include Patek Philippe, Richard Mille, or Audemars Piguet (Royal Oak).

Caution required to protect against loss

Street thefts aren’t the only threat to owners’ valuables. Insurers have also observed a growing incidence of fraud, with collectors reporting lost pieces which, on further investigation, turned out to be fakes. Some have responded by asking owners to provide serial numbers for any piece prior to receiving cover, along with fully accredited valuations as opposed to picture valuations. It is expected that high-value pieces are held in an adequately cash rated safe.

Of course, not all losses involve third parties. One insurer puts instance of ‘pure loss’ (in which there is no financial gain) and accidental damage at a higher likelihood than theft, at 50% and 30% of total losses respectively. Pure loss is a particular risk for older consumers, who are liable to forget where pieces have been placed, or to whom they have been leased. Maintaining an active inventory offers a reliable means for protection.

Rates ‘no better than stable’ in 2024

Given the broad range of factors impacting the market, it is little surprise that insurers’ opinion varies when it comes to forecasting the year ahead. The rise in watch values, while good news for owners, is testing the nerves of many insurers. And while some are still offering coverage for collections on a standalone basis, others are turning their attention elsewhere, focusing on lesser risks such as women’s jewellery.

Nevertheless, there is broad consensus that the outlook for insurance buyers is unlikely to improve in the near future. Among the most pessimistic estimates, potential rate increases for watches could be as high as 2-3%. Even the most optimistic of commentators projected rates at ‘no better than stable’.

Recommendations for protecting against loss:

  • Inspect pieces first-hand prior to purchase – viewing pieces in person reduces the likelihood of purchasing a fake. Where possible, ensure certificates of authenticity are included.

  • Actively maintain an inventory of all owned pieces – this will protect against pure loss, for instance, where items are lent out or misplaced

  • Ensure valuations are up to date – particularly in the watches market, prices can be volatile. Pieces can quickly become underinsured if there is a change in demand.

  • Exercise discretion when wearing valuable items – be mindful of the environments in which you move, including potential hotspots for theft. Take steps to conceal items when in public.

  • Should a theft occur, register pieces immediately with The Watch Register or similar databases, and report it to the Police.

  • Register watches via available online databases. The Richemont Group have an online registration, Enquirus (opens a new window), where collectors can register all their watches in a “vault”. In the event of a theft or loss, Enquirus will provide all the detail to the necessary authorities. By using the search function, with the brand and the serial number, collectors can check the status of a piece.

For further information, please visit our Lockton Private Clients (opens a new window) page, or contact:

Charles Hamilton-Stubber, Senior Vice President

E: charles.hamilton-stubber@lockton.com

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